UAE-based Arada Developments, rated B1 by Moody’s and B+ by Fitch, said it has successfully completed the issuance of its second public financing deal, a $400 million sukuk, which has been listed on the London Stock Exchange and the Nasdaq Dubai. 

 

This is the first issuance under Arada’s newly established $1 billion sukuk programme.

 

The five-year fixed rate RegS Sukuk issuance, rated BB- by Fitch and B1 by Moody’s, was priced at par with a coupon of 8%, inside the initial guidance area of 8.675% for a spread of 355 bps over US Treasuries.

 

The trade achieved one of the highest price tightening by a real estate issuer from the GCC, and also priced with a spread which is more than 150bps inside the previously priced debut Sukuk. 

 

The proceeds of the Sukuk will be used for the management of existing bilateral funding, general corporate purposes and to support development at Arada’s existing projects.

 

The Sukuk issuance saw strong demand from both regional and international investors, with a subscription order book of $1.45 billion, 3.5 times the offer size.

 

On the new sukuk, Arada Vice Chairman Prince Khaled bin Alwaleed bin Talal said: "We are pleased to have enjoyed a successful return to the market with the closure of our second sukuk. This landmark issuance is once again testament to the strong level of interest from institutional investors around the world in Arada’s stable track record, good governance and compelling growth story."

 

Investor interest for the sukuk was diversified geographically, coming from Europe, the Middle East and Asia. The investors for this issuance include institutional investors, fund managers, High Net Worth Individuals (HNWIs), and banks.

 

The joint global co-ordinators for the sukuk were Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD Capital and Standard Chartered Bank, while Arab Bank, Kamco Invest, Mashreq, RAK Bank, Sharjah Islamic Bank and Warba Bank acted as Joint Lead Managers and Bookrunners.-TradeArabia News Service